What do I tell my neighbor? She thinks she’s being rescued from foreclosure. Is she?

What do I tell my neighbor? She thinks she’s being rescued from foreclosure. Is she?


You’ve seen it in the news (Swindlers Find Growing Market in Foreclosures, 1/15/2009, http://www.nytimes.com/2009/01/15/us/15mortgage.html; Mortgage Fraud Case Poses Federal Quandary, 3/7/2009, http://www.nytimes.com/2009/03/08/nyregion/08scam.html).
 
And you know that scammers are out there, ready to prey upon the most vulnerable of homeowners. Looking for help to avoid foreclosure makes them vulnerable. We get advice about where to turn for help -- including, go to a housing counselor who is referred by the state or federal government -- but how do we know whether a foreclosure rescue scam might be going on right in front of us?
 
When I asked author and predatory lending expert Melissa A. Huelsman what she would gently say to a neighbor who thinks she is being “rescued” from foreclosure, Ms. Huelsman suggested, “I would find some of the recently published articles and news stories and show them to her. Tell her that you saw these stories and they made you think of her, and you wanted her to be sure that she had done everything she could to protect herself and make certain that she was not about to fall victim to one of these scams. You can also do an Internet search about the company with whom she is involved and see if anyone else is talking about them -- good or bad. You do have to beware of the endorsements on some of these companies' websites because there's no way to know about the validity of the endorsement so I would be more focused on looking for complaints. I have also seen the situation where a person who issues an endorsement does so before he or she realizes he or she has been defrauded.”
 
A free download of an excerpt detailing the Anatomy of a Foreclosure Rescue Scam from Melissa A. Huelsman’s chapter on Foreclosure Rescue Scam Litigation (published this Spring in LexisNexis’s Real Estate Financing treatise) is available on this Real Estate Law Center. Ms. Huelsman is a Seattle-based attorney who has spoken on the issues of predatory lending and foreclosure rescue scams at many CLEs and Bar functions across the country. Her practice involves plaintiff’s civil litigation in the areas of predatory lending and mortgage loan servicing, fraud and foreclosure rescue scams.
 
I will mention some other sources of practical advice for consumers here, and invite others to post additional ones. One is a video “offering practical tips and advice for homeowners facing mortgage foreclosure” given by attorneys through the New York State Bar Association, Saving Your Home From Foreclosure - at http://204.8.127.102/peopleslaw/SaveYourHome.htm. To search for a HUD-approved foreclosure avoidance counselor, start at http://www.hud.gov/offices/hsg/sfh/hcc/fc/ which states that “[a]s part of President Obama's comprehensive Homeowner Affordability and Stability Plan (HASP), you may be eligible for a special Making Home Affordable loan modification or refinance, to reduce your monthly payments and help you keep your home.”